Tuesday, 12 July 2016

Forget populist executive pay curbs: Prime Minister May should embrace these six policies to revitalise growth

1) Overhaul property taxation: the government should abolish both council tax and stamp duty entirely and replace them with a single tax on the 'consumption' of property - i.e. a tax on imputed rent. it is well known among economists that taxes on transactions like stamp duty are highly damaging and we have already seen the high top rates significantly slow transactions since April.

[and]

5) Agricultural liberalisation: exiting the EU Common Agricultural Policy gives us the opportunity to reassess agrilcultural policy. The UK should gradually phase out all subsidies, as new Zealand did, opening up the sector to global competition. This improved agricultural productivity in that country significantly. Combined with a policy of unilateral free trade, it would deliver substantially lower food prices for consumers too.

Suggestion 2 is bollocks though - abolishing corporation tax. UK businesses pay three times as much VAT as they do corporation tax; reducing VAT (which we could now do, hooray) benefits the economy in general, small businesses, workers and consumers. Abolishing corporation tax only benefits large and especially multi-national businesses, at present it is only 20%, which is internationally competitive and ties in with income tax, so no urgency there whatsoever.